Factors Affecting The Arbitrage Pricing Theory Finance Essay - Free Essay Example

Sample details Pages: 11 Words: 3368 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? Capital Markets play a vital role in the financial sector of each economy. The primary role of the capital market is to raise long-term funds for governments, banks, and corporations while providing a platform for the trading of securities. An efficient capital market can promote economic growth by attracting domestic and foreign capital. 1.1.2 Karachi Stock Exchange and its profile The Karachi Stock Exchange is an example of a capital market which is the biggest and most liquid exchange in Pakistan. It was declared the Best Performing Stock Market of the World for the year 2002. A total of 650 companies were listed on the Karachi Stock Exchange (KSE) as of endÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ March 2010, with paid up capital of Rs. 894.2 billion. Aggregate market capitalization as at end March, stood at Rs. 2,890 billion (US$ 35 billion). (Source: Economic Survey of Pakistan) Don’t waste time! Our writers will create an original "Factors Affecting The Arbitrage Pricing Theory Finance Essay" essay for you Create order 1.1.3 KSE- 100 INDEX The primary objective of the KSE100 index is to have a benchmark by which the stock price performance can be compared to over a period of time. In particular, the KSE 100 is designed to provide investors with a sense of how the Pakistan equity market is performing. The KSE-100 Index was introduced in November 1999 with base value of 1,000 points. The Index comprises of 100 companies selected on the basis of sector representation and highest market capitalization, which captures over 80% of the total market capitalization of the companies listed on the Exchange. Out 35 Sectors, 34 companies are selected i.e. one company from each sector (excluding Open-End Mutual Fund Sector) on the basis of the largest market capitalization and the remaining 66 companies are selected on the basis of largest market capitalization in descending order. This is a total return index i.e. dividend, bonus and rights are adjusted. The formula for calculating the KSE- 100 Index is: [(Sum of Shares Outstanding x Current Price) / Base Period Value] x 1000 Or (Market Capitalization / Base Divisor) x 1000 1.1.4 Top 30 KSE 100 Index Companies The following is a list of 30 companies with the highest market capitalization volume and their respective weightages in the index and account for over 80% of the KSE index as of February 20, 2008: Number Company Name Weightage (%) Market Capitalization (PKR) 1 OGDCL 14.14 550,948,930,000 2 MCB 7.17 279,583,150,000 3 National Bank of Pakistan 5.43 211,726,900,000 4 Pakistan Petroleum 5.06 197,201,080,000 5 Standard Chartered Bank 4.41 171,704,800,000 6 PTCL 4.28 166,810,800,000 7 United Bank Limited 4.13 161,025,160,000 8 Jahangir Siddiqui Company 2.66 103,600,000,000 9 Pakistan State Oil 2.08 81,034,440,000 10 Allied Bank Limited 2.01 78,371,670,000 11 Nestlà © Pakistan 1.93 75,280,250,000 12 Pakistan Oilfields 1.71 66,824,220,000 13 Fauji Fertilizer Company 1.68 65,607,390,000 14 ABN AMRO 1.63 63,666, 370,000. 15 Engro Chemical 1.45 56,492,990,000 16 Arif Habib Securities 1.40 54,660,000,000 17 NIB Bank 1.27 49,320,250,000 18 Kot Addu Power Company 1.19 46,565,400,000 19 EFU General Insurance 1.16 45,300,000,000 20 Bank of Punjab 1.13 43,869,030,000 21 Fauji Fertilizer Bin Qasim 1.06 41,474,480,000 22 Bank Alfalah 1.03 39,975,000,000 23 Adamjee Insurance 1.01 39,258,300,000 24 Pakistan Tobacco Company 0.99 38,707,280,000 25 Sui Northern Gas Pipelines 0.98 38,300,100,000 26 Hub Power Company 0.98 38,128,240,000 27 Dawood Hercules Chemicals 0.91 35,549,620,000 28 Habib Metropolitan Bank 0.91 35,354,280,000 29 EFU Life Assurance 0.89 34,750,000,000 30 Lucky Cement 0.86 33,593,480,000 Relevance of the Topic and Research Title This research aims to identify what extra market factors should be considered as likely candidates when investigating stock market volatility and in that lies this research titles relevance. The APT model is dependent on many variable factors and there are various adverse factors in Pakistan which affects stocks returns in the KSE like political tensions, law and order situation, water shortage, floods, earthquakes and flood and energy crisis. So this thesis paper will help to identify the factors which have a positive, negative or no correlation with stock returns. Impact of 2008 Economic/ Political Crisis on KSE 100 Index The KSE 100 Index had many swings during the fiscal year 2008 and the key factors affecting it were as follows: May 23: High inflation in the month of May, 2008 resulted in the unexpected increase in the interest rates by State Bank of Pakistan which eventually resulted in sharp fall in Karachi Stock Exchange and its indexes. July 16: KSE-100 Index dropped one-third from an all-time high hit in April, 2008 as rising pressure on Pakistans government to tackle Taliban militants worsens concern about the countrys economic woes. July 17: Angry investors attacked the Karachi Stock Exchange in protest at plunging Pakistani share prices which further led to a decrease in share prices. August 18: KSE 100 Index rose more than 4% after the announcement of the resignation of President Pervez Musharraf. So the chain of events/ facts shows how different incidents/ factors can affect the share prices in Pakistan and that is what this research paper will aim at. Background information and Evolution Capital Asset Pricing Model (CAPM) The capital asset pricing model states that the price of a stock is related to two variables; the time value of money and the risk of the stock.   The time value here is represented by the risk free rate of interest. The CAPM model keeps into account the overall stock market risk and that is the only factor which it incorporates, something which became dubious when this asset pricing model was used in earlier times. Later, researchers figured out that there were other factors as well which would affect stock returns so a new model for pricing was needed. Arbitrage Pricing Theory (APT) The APT states that each stocks return to the investor is influenced by several independent factors. It is given by the following formulae: Expected Return = RF + B1 x (factor 1) + B2 x (factor 2) + + Bn x (factor n) Where: RF = the risk free interest rate is the interest rate the investor would expect to receive from a risk free investment. b = the sensitivity of the stock to each factor. Factor = the risk premium associated with each factor. There are no specific factors for this model as theory doesnt suggest any, because the stock returns could vary as one stock might be more sensitive to one factor than another. For example the price of crude oil might be sensitive to the share of OGDCL but not to the share of MCB. There are other various macroeconomic variables which affect the arbitrage pricing model which includes Inflation, GNP, Shifts in Yield Curve and Investor Confidence. Characteristics of the Arbitrage Pricing Model Arbitrage Pricing Model considers the following risk factors: Company specific risk. Interest rate (time horizon risk). Inflation risk. Confidence risk. A multi factor or multi variable model best describes the arbitrage pricing model. It does not specify its risk factors. Timely and accurate information of the variables is required. The relationship should be theoretically justifiable on economic grounds. It works better for individual stocks rather than for a group of stocks. It is used less than the Build-up model, CAPM model or the Discounted Cash Flow model. 1.3.4 Difference between CAPM and APT model The difference between CAPM and arbitrage pricing theory is that CAPM has a single non-company factor and a single beta, whereas arbitrage pricing theory separates out non-company factors into as many as proves necessary to be included. Each of these requires a separate beta. The beta of each factor is the sensitivity of the price of the security to that factor. 1.3.5 Advantages and limitations of the APT model Following are the advantages of the APT model: It is not as restrictive as the CAPM in its requirement about individual portfolios and with respect to the information structure it allows. It allows multiple sources of risk which provides an explanation of what moves stock returns. Limitation of the APT model: APT expects investors to assume or perceive the risk sources. 1.3.6 Assumptions of the Arbitrage Pricing Theory Capital Markets are perfectly competitive. Investors always prefer more wealth to less wealth. Perfect competition prevails and there is no transaction cost in the market: frictionless market. Managerial Concerns pertaining to Research Decisions are made by managers every day. And in order to make fruitful decisions one needs to have firm knowledge over the issue or need to research and know about it to master at whatever they want to do. So the more important the decisions and their impact, the more important the research becomes. If decisions are made randomly then their consequences would be resulting in considerable harm to a large number of people related to it. Hence the research should be refined so that managers can use them to apply the theory and findings to their daily life. From this research, managers can get to know which factors affect their companys stock prices so they would devise policies with regard to that in the favor of their companies to avoid losses. Academic Concerns pertaining to Research Students and researchers might find it important to consult the research paper in order to understand the underlying concept of the topic researched on. It could be of vital importance if they want to derive on to something related to the topic. Also the research can be used to see how analysis is carried out in the case of stock returns and its factors and which factors affect the stock returns. Keywords and Definitions Arbitrage: It is the process of earning profits by taking advantage of differential pricing for the same asset. Arbitrage Pricing Theory: The theory focuses to calculate the returns in absence of arbitrage-condition of artificially overpricing or underpricing a product. It applies to economies that are regulated by the Law of One Price which states that two identical goods cant be sold at the same price. Arbitrage Pricing Model: An asset pricing model which predicts a relationship between the returns of a  portfolio and the returns of a single asset through a linear combination of many independent macro-economic variables. Stock Market: It is the market in which  shares are issued and traded either through exchanges or  over-the-counter markets. Also known as the equity market, it is one of the most vital areas of a market economy as it provides companies with access to capital and investors with a slice of ownership in the company and  the potential of gains based on  the companys  future performance. Multifactor Model: A multifactor model is an alternative to a single risk based model. It can either be from an Arbitrage pricing theory or from a multi-beta CAPM perspective incorporating multiple factors which are responsible for the asset returns. Study Objectives To find out which factors have a linkage with stock prices in general and with respect to Karachi Stock Exchange. To find out which factors have a positive, negative or no correlation with stock prices in the stock market. Chapter 2: Literature Review Various literatures were consulted for this research paper and it was found that the level of return achieved or expected from an investment is dependent on a variety of factors. The single index model or the CAPM was developed by Sharpe (1963) which was unsuccessful as its main shortcoming was that it used only the market return as a single factor to determine security return. This led way to the multifactor model or APT model developed by Ross (1976) which incorporated other variables affecting stock returns. 2.1 Evidence from Stock Markets 2.1.1 Evidence from the Japanese Stock Market A.A Azeez and Yasuhiro investigated the evidence of pricing of macroeconomic factors in the Japanese stock market during the bubble period using the Arbitrage Pricing Theory model. They also examined the pre and post bubble periods in order to compare the robustness of prices factors over the bubble period. The main objective of their study is to analyze empirically the asset pricing mechanism of Japanese stock market during the bubble economy by the use of macroeconomic based APT. The data is divided into the three bubble categories in order to analyze the results and in each period there are four factors which carry risk premiums in the Japanese stock market; money supply, inflation, exchange rate and industrial production. In choosing the variables special consideration is given to any economic announcements which will affect stock price movements if the new information revealed by announcements affects either expectations of future dividends or discount rates or both.  [1] 2.1.2 Evidence from Turkish Stock Exchange Ahmet gave evidence of effects from Turkish Stock Exchange stating seven macroeconomic variables (consumer price index, money market interest rate, gold price, industrial production growth index, oil price, foreign exchange rate and money supply) affecting the Istanbul stock Exchange Index- 100. He designed a multiple regression model and concluded saying that interest rate, industrial production index, oil price and foreign exchange rate have negative effect on ISE-100 index while money supply has a positive one. On the contrary inflation rate and gold price does not have any significant effect on the dependent variable. 2.1.3 Evidence from Indian Stock Exchange Aman from India has carried out a research based on literature review and has concluded the relevance of macroeconomic factor for stock markets. According to his findings stock markets are affected by macroeconomic factors which may be local or international. Key variables mentioned by him affecting in the longer run are industrial production, inflation, foreign exchange rate, interest rate and money supply. 2.1.4 Evidence from Italian Stock Market Arduino Cagnetti did an empirical study in the Italian Stock Market by comparing the APT and CAPM models and found that APT performs better than the CAPM in all aspects. Many of the factors that he found significant were inflation, interest rates, money variables, market indices, production indices and international trade variables. 2.1.5 Evidence from Karachi Stock Market Babar, Kashif, Aslam and Nadeem documented the results by examining the stock returns variations to specific economic variables by applying a multi factor model in context of Karachi Stock Exchange. The 32 firms for which data was taken were related from the two most important industries of Pakistan: Banking and Textile Industry which were the top performers at KSE-100 index. They incorporated variables like market index, consumer price index, risk free rate of return, exchange rate, industrial production growth rate, money supply and individual industrial production to run analysis using the GARCH model. Javed Iqbal and Aziz Haider provide evidence from the Karachi Stock Exchange by carrying out the exploratory factor analysis by breaking the sample for stability testing. They chose sixteen macroeconomic variables out of which some were interest rate, money market rate, long term interest rate yield and regional market. 2.2 Joint estimation of factor sensitivities and risk premia for the APT In this study Edwin and Marjorie maintained a linear factor model and used both measured and unmeasured factors to estimate a LFM, the APT, and a CAPM. They found that the January effect is an important determinant of expected returns. The existence of a January effect that is not explained by this set of factors is evident, but, it would be trivial to add a portfolio that exhibits a strong January effect and hence represents a January factor. 2.3 The Conditional relation between Beta and Returns In this paper, Glenn, Sridhar and Ike find a consistent and highly significant relationship between beta and cross-sectional portfolio returns. The key distinction between the tests is the recognition that the positive relationship between returns and beta predicted by the Sharpe-Lintner-Black model which is based on expected rather than realized returns. In periods where excess market returns are negative, an inverse relationship between beta and portfolio returns should exist. 2.4 Explaining the cross section of returns via a multi factor APT model This paper by Jianping uses an autoregressive approach to test a multi-factor model with time-varying risk premiums. A quasi-differencing approach is used to eliminate the unobservable factors in the model. It is found that the model is capable of capturing the size effect and the dividend yield effect, but is incapable of explaining the book-to-market effect and the earnings-price ratio effect. Thus, it is concluded that a constant-beta multi-factor model will not be able to explain the cross-sectional variation in expected returns. 2.5 Economic Forces and the Stock Market This paper tests whether innovations in macroeconomic variables are risks that are rewarded in the stock market. Financial theory suggests that the following macroeconomic variables should systematically affect stock market returns: the spread between long and short interest rates, expected and unexpected inflation, industrial production, and the spread between high and low grade bonds. It is found that these sources of risk are significantly priced. Furthermore, neither the market portfolio nor aggregate consumption is priced separately. Also the oil price risk is not separately rewarded in the stock market. 2.6 Macroeconomic factors do influence aggregate stock returns This paper helps to find that the stock market returns are significantly correlated with inflation and money growth. The impact of real macroeconomic variables on aggregate equity returns has been difficult to establish, perhaps because their effects are neither linear nor time invariant. GARCH model of daily equity returns is used for estimation, where realized returns and their conditional volatility depend on 17 macro series announcements. Six factors are used: three nominal (CPI, PPI, and a Monetary Aggregate) and three real (Balance of Trade, Employment Report, and Housing Starts). Popular measures of overall economic activity, such as Industrial Production or GNP are not used. Chapter 3: Methodology and Analytical Choices 3.1 Framework of Analysis Dependent Variable: KSE 100 index Independent Variables (Factors): Consumer Price Index (measure of inflation) Money supply Interest Rates Exchange Rates Gross Domestic Product (measure of output) Potential Factors which havent been incorporated: Business cycle/ Time Horizon Regional Market Return Political Events (corruption, Assassinations, law and order situation) Natural Disasters/ Calamities Gold Price Industrial Production Growth Rate Oil Price Shifts in yield curves Default risk premiums for bonds(measures investor confidence) Private placements January effect Bank mergers Announcement effects (mergers, monetary policy) 3.2 Statement of Research Hypothesis Hypothesis 1: Ho: Consumer Price Index has a significant impact on KSE 100 index. H1: Consumer Price Index does not have a significant impact on KSE 100 index. Hypothesis 2: Ho: Money supply has a significant impact on KSE 100 index. H1: Money supply does not have a significant impact on KSE 100 index. Hypothesis 3: Ho: Interest Rates have a significant impact on KSE 100 index. H1: Interest Rates do not have a significant impact on KSE 100 index. Hypothesis 4: Ho: Exchange rates have a significant impact on KSE 100 index. H1: Exchange rates do not have a significant impact on KSE 100 index. Hypothesis 5: Ho: GDP have a significant impact on KSE 100 index. H1: GDP do not have a significant impact on KSE 100 index. 3.3 Elements of Research Design Type of Research: Exploratory research as the problem has not been clearly defined and the problem has multiple sensitivities attached to it. Study Setting: Natural as the data will be derived without any intervention from the natural environment. Nature of Data: Time Series Data. Data Collection Preferences Data is to be calculated for a period of 10 years so that there is no potential bias due to time horizon. Variable Definition Sources KSE 100 index It is a stock index acting as a benchmark to compare prices on the Karachi Stock Exchange (KSE) over a period of time State Bank of Pakistan Consumer Price Index It measures changes through time in the price level of consumer goods and services purchased by households Federal Bureau of Statistics Gross Domestic Product It is the market value of all final goods and services made within the borders of a country in a year CIA World Fact book Money Supply Money and quasi money comprise the sum of currency outside banks, demand deposits other than those of the central government, and the time, savings, and foreign currency deposits of resident sectors other than the central government. This definition is frequently called M2 International Financial Statistics Interest Rate It is the money ma rket interest rate. State Bank of Pakistan Exchange Rate This entry provides the official value of a countrys monetary unit at a given date or over a given period of time, as expressed in units of local currency per US dollar CIA World Fact book 3.5 Data Collection and Related Procedures Exploratory research often relies on secondary sources such as reviewing available literature or data so secondary sources will be used to collect data. That includes research papers and literature reviews taken online from various electronic journals and databases and course books for theory purposes. 3.6 Statement of Analytical Approach and Methodology Descriptive Statistics will be used initially and then covariance of dependent and independent variables will be seen to check for variables. When variables will be finalized, autocorrelation will be done to check for stationarity and then econometric modeling will be done by using multi regression model using the OLS to find out the hypothesis results. 3.7 Limitations With Arbitrage Pricing Model it is difficult to identify the appropriate relevant factors as theory does not suggest any specific ones. Monthly data was not available for all variables so yearly had to be taken into account which might affect the analysis results.

Viewing the Cuban Missile Crisis Through the Eyes of an...

In October of 1962, Bill Doman was living the American dream in Salt Lake City Utah. He had a wife, three small children and a steady job. He had recently graduated from the University of Utah and was awaiting his formal release from the military reserves, having served briefly in the Korean War some nine years earlier. Bill is a proud American, a history buff, which cultivated his love of this county. Then, in just thirteen days, his way of thinking concerning the security of the United States and his very own family was changed forever with the advent of the Cuban missile crisis (Doman). On the morning of October 16, 1962 the beginning of the Cuban Missile Crisis, President John F. Kennedy learned from surveillance film obtained by†¦show more content†¦President Kennedy asked General Walter C. Sweeney, Commander in Chief of the Tactical Air Command if they could destroy all other missile sites and nuclear weapons in Cuba with an invasion. General Sweeney said they could take out all of the missiles they knew about but there may be one - five they would miss. President Kennedy knew that even one missile could kill millions of Americans and he could not accept the risk of that happening. Because of that he endorsed the naval quarantine. Following the blatant lie by Gromyko and newly acquired information from recent surveillance film confirming the shipment of missiles and the building of bases in Cuba, President Kennedy felt it was necessary to make this information available to the people of the United States and world on Monday, October 22, 1961 (14 days in October, Day 6 7). When Bill had received word that President Kennedy was going to address the nation on the 22nd of October 1962, concerning events that threatened the security of the country he became very nervous. Bill was not aware of what the President was going to speak about but he had a hunch it may involve the Russians. He had recalled of the U2 plane that was shot down inside Russia shortly before the Paris summit in 1960 and the failed attempt to over throw the Cuban Government in the Bay of Pig invasion. He realized this caused major distrust onShow MoreRelatedThe Legacy of John F. Kennedy Essay2477 Words   |  10 PagesOur Fellow American The late president John Fitzgerald Kennedy once said, â€Å"Sure its a big job; but I dont know anyone who can do it better than I can† (â€Å"John F. Kennedy† BrainyQuote.com). Kennedy was a young and fresh political figure at the time of his election in 1960. The thirty-fifth president of the United States was born May 29, 1917, in Brookline, Massachusetts. He was the youngest president ever, as well as the first and only Roman Catholic president (Bass, et al.). His presidency wasRead More JFK ASSASINATION THEORY Essay3447 Words   |  14 PagesKennedy was probably the most beloved and popular president to ever sit in the Oval Office. He was the icon of our country. His youth and charisma personified the American citizen. His beautiful wife and his two young children optimized the perfect family. His war hero and his highly educated manor earned the respect and reverence of American society. He was truly the common mans president. John Fitzgerald Kennedy was born on May 29, 1917 in Brookline, Massachusetts. The Kennedy name had alreadyRead MoreOne Significant Change That Has Occurred in the World Between 1900 and 2005. Explain the Impact This Change Has Made on Our Lives and Why It Is an Important Change.163893 Words   |  656 Pagesand Paul Buhle, eds., The New Left Revisited David M. Scobey, Empire City: The Making and Meaning of the New York City Landscape Gerda Lerner, Fireweed: A Political Autobiography Allida M. Black, ed., Modern American Queer History Eric Sandweiss, St. Louis: The Evolution of an American Urban Landscape Sam Wineburg, Historical Thinking and Other Unnatural Acts: Charting the Future of Teaching the Past Sharon Hartman Strom, Political Woman: Florence Luscomb and the Legacy of Radical Reform Read MoreRastafarian79520 Words   |  319 Pageshave been used to explain other religious phenomenon dont always apply comfortably to the peculiar developments of Rastafarianism. For instance, very few modern religions have assumed such a signiï ¬ cant place in the mainstream of popular culture through the use of music. Marley is not seen as a religious ï ¬ gure; rather he is seen as a rock star, a pop hero, an icon. And yet his faith is at the core of his music. Rastafarians have dubbed Marley the psalmist and prophet of the movement. This is aRead MoreDeveloping Management Skills404131 Words   |  1617 PagesStyle 74 Attitudes Toward Change 76 Core Self-Evaluation 79 SKILL ANALYSIS 84 Cases Involving Self-Awareness 84 Communist Prison Camp 84 Computerized Exam 85 Decision Dilemmas 86 SKILL PRACTICE 89 Exercises for Improving Self-Awareness Through Self-Disclosure 89 Through the Looking Glass 89 Diagnosing Managerial Characteristics 90 An Exercise for Identifying Aspects of Personal Culture: A Learning Plan and Autobiography 92 SKILL APPLICATION 95 Activities for Developing Self-Awareness 95 Suggested AssignmentsRead MoreStephen P. Robbins Timothy A. Judge (2011) Organizational Behaviour 15th Edition New Jersey: Prentice Hall393164 Words   |  1573 PagesThree Ethical Decision Criteria 187 †¢ Improving Creativity in Decision Making 188 Summary and Implications for Managers 190 S A S A S A L L L Self-Assessment Library What Are My Gender Role Perceptions? 166 glOBalization! Chinese Time, North American Time 171 Myth or Science? Creative Decision Making Is a Right-Brain Activity 181 Self-Assessment Library Am I A Deliberate Decision Maker? 183 An Ethical Choice Whose Ethical Standards to Follow? 185 Self-Assessment Library How Creative Am I? 190

Hamlet Complex Decision Free Essays

string(196) " dreadful secrecy impact they did, And I wait them the third night kept the watch, Where as they had delivered, both in time, Form of the thing, each word made true and good The apparition comes\." Professor Maureen Edison World Literature 1 Asmaa Abdelaal Essay 1 Hamlet Complex Decision Abdelaal 1 Hamlet Complex Decision â€Å"To be, or not to be, that is the question† (Hamlet, 2446). To live or to die? Do I take avenge or not? To leave Denmark polluted or not? Hamlet a young prince of Denmark faces the truth of the former King. Hamlets father death was an actual murder. We will write a custom essay sample on Hamlet Complex Decision or any similar topic only for you Order Now In addition the Queen Hamlets mother marries Hamlets Uncle, Claudius and former Kings brother. Hamlets throughout the play faced a complex decision either to live as if his father was not murdered or to kill who murdered his father. Hamlet father is King Hamlet and his mother Queen Gertrude. Hamlet full of hate for his Uncle and disgust of his mothering marrying him. â€Å"Seems, madam? Nay, it is. I know not seems. Tis not alone my inky cloak, good mother, Nor customary suits of solemn black, Nor windy suspiration of forced breath, No, nor the fruitful river in the eye, Nor the dejected’ havior of the visage, Together with all forms, moods , shapes of grief, That can denote me truly. These indeed â€Å"seem,† For they are actions that a man might play. But I have that within which passeth show, These but the trapping and the suits of woe. (Hamlet, 2417) Abdelaal 2 Hamlets black cloths is his weeping and â€Å"seem† fake grief. Fake grief is sadness the cloths is just a hint of it. Hamlets father ghost appears and claims to have been murdered by Claudius. Hamlet obsessed with avenging his father death but keeps thinking of reasons why he should wait before killing Claudius. Gertrude knows h ow Hamlet feels cares more about how she sees herself. The new King of Denmark Claudius, Hamlet Uncle. Claudius is calculating is power. Claudius doesn’t know until later on that Hamlet has found the truth about his father death. Polonius is father of Laertes and Ophelia. Polonius throughout the play tries to figure what Hamlet up to. Horatio is a close friend to Hamlet which they both studied at the same University of Wittenberg. Hamlet trusts Horatio because he is loyal and helpful. Horatio such a good friend he comes to the funeral/ wedding to stand by Hamlets side. â€Å"O God, beast that wants discourse of reason Would have mourned long! – married with my uncle, My father brother but no more like my father Than I to Hercules. Within a month, Ere yet the salt of most unrighteous tears Had left the flushing in her galled eyes, She married. O most wicked speed, to post With such dexterity to incestuous sheets! It is not nor it cannot come to good, But break, my heart, for I must hold my tongue. † (Hamlet, 2420) Abdelaal 3 This is what Hamlet sees happening his mother marrying his father brother in less than of a month of his father death even before tears come down on his mother cheeks had dried she was too quick to move on. Ophelia is Polonius daughter a beautiful girl who Hamlet in love with. In the play Ophelia obeys her father and her brother Laertes allowing Polonies to use her to spy on Hamlet. Later on her father will die. Laertes is Polonius son and Ophelia brother. Laertes is thoughtful of Hamlet. Polonius thinks a man on fire not Hamlet who heart on fire which gives more light than heat and fire will be out before his promises are done. He thinks Ophelia mistaking love and wants her to spend less time with him. He tells her to remember him young that he knows how to fool around you and to not bileve his nice cloths and order her to do as he says. Ophelia obeys the order. â€Å"Ay, springs to catch woodcocks. I do know, When the blood burns, how prodigal the soul Lends the tongue vows. These blazes, daughter, Giving more light than heat, extinct in both Even in their promise as it is a making, You must not take for fire. From this time Be somewhat scanter of your maiden presence. Set your entremets at higher rate Than a command to parley. For lord Hamlet, Bileve so much in him that he is young, And with a larger tether may he walk Than may be given you. In few, Ophelia, Do not believe his vows, for they are brokers Not of that dye which their investments show, But mere imploratory of unholy suits, Breathing like sanctified and opioids bawds, The better to beguile. This is for all I would not, in plain terms, from this time forth, Have you so slander any moment leisure, Alto give words or talk with Lord Hamlet, Look to ‘t’ I charge you. Come your ways† ( Polonius, 2422) Fortinbras is young prince of Norway the King of Fortinbras which was killed by Hamlets father. Now out of revenge Fortinbras wishes to attack Denmark to avenge his father honor. Gotland and Cornelius are courtiers who Claudius sends to Norway to stop Fortinbras from attacking Denmark. Hamlets father who wants his son Hamlet to take avenge to what happened to him. Hamlet at first when hears from Marcellus and Barnardo about a ghost who they suspect might be his father thinks that the ghost is a devil sent to deceive him where the ghost comes from in the play is never said. Marcellus is the first officer see too she the ghost with Hamlets. â€Å"Two nights together had these gentlemen, Marcellus and Barnardo, on their watch, In the dead waste and middle of the night, Been thus Abdelaal 5 encountered: a figure like your father, Armed at point exactly, cap_a-pie, Appears before them and with soleman march Goes slow and stale by them. Thrice he walked By the oppressed and fear surprised eyes Within his truncheons length, whilst they, distilled Almost to jelly with the act of fear, Stand dumb and speak not to him. This to miens dreadful secrecy impact they did, And I wait them the third night kept the watch, Where as they had delivered, both in time, Form of the thing, each word made true and good The apparition comes. You read "Hamlet Complex Decision" in category "Papers" I knew your father, The hands are not more like. † ( Horatio, 2418) After midnight for two nights the officers think that the figure they keeping seeing is Hamlet father. The guard were scared yet amazed at the same time on the third night it happened again and that when they told Hamlet. â€Å"So have I heard and doing part bileve it. But look the Oren in russets mantle clad. Walked o’er the dew of yon high eastward hill. Break we our watch quip, and by my advice. Let us impact what we have seen tonight. Unto young Hamlet: for upon my Abdelaal 6 life, this spirit dumb to us, will speak to him. Do you concept we shall acquaint him with it.. As needful of our loves, rotting our duty? †( Horatio, 2419). Horatio, fellow student, and best friend of Hamlets tell him he has seen his father ghost, he would not say word until he speaks to Hamlets. Hamlet accepting to see the ghost was a decision he made. Later it will change his image towards his mother and Claudius. After, Horatio tells Prince Hamlet, the ghost won’t speak only to Hamlet. The ghost tells Hamlet to take avenge. â€Å"I am thy father spout doomed for certain term to walk the night, And for the day confined to fasting fires, Till the foul crimes doe in my days of nature, Are burnt and purged away. But that I am forbid to tell the secret of my prison house† (Ghost, 2430). The ghost is very angry and wants avenge. † Avenge his foul and takes him he was murder but hissed by his uncle Claudius. † O, my prophetic soul! U my uncle â€Å"(Hamlet, 2429). With that said, he had to make an important decision whether to bileve the ghost or not. This decision means allot to him because he is supposed to be next in the throne not his Uncle. In addition, the Queen the wife of the former King, marries the brother Claudius, who is the King of Denmark. Abdelaal 7 â€Å"Thought yet of Hamlets, our dear brother death. The memory is green, and that it is us befitted. To bear us hearts in grief and our whole kingdom. To be contracted in on brow of woe, Teat so far hath discretion fought with nature. That we with wise sorrow think of him, Together with remembrance ourselves, therefore our sometime, sister now our queen† (King, 2417). The King. He hath not failed to pester us with the message, importing the surrender of those lands, lost by his father with all bonds of law† (King, 2417). Hamlet is not happy, but he can’t disobey the Queen nor the King. Claudius gives a negative, ignorant sneaky, impression to rule Denmark. Hamlet can’t adapt to the new life in Denmark, under his Uncle, the Kings throne. Befor e Hamlet made any decisions he had to think through what the ghost said to him that night. â€Å"I am thy fathers spirit, Doomed for certain term to walk the night And for the day confined to fast in fires, Till the foul crimes done in my days of nature Are burnt and purged away. But that I am forbid To tell the secrets of my prison Abdelaal 8 house, I could a tale in fold whose lightest word Would harrow up thy soul, freeze thy young blood, Make I fin three apt, And duller shrouds thou be than the fat weed That roots itself in ease on Lethe wharf, Wouldst thou not stir in this. Now, Hamlet, hear. Tis given ot that, sleeping in my orchard, A serpent stung me. So the whole ear f of Denmark is by a forged process of my death rankly abused. But know, thou noble youth. The serpent that did sting thy atheist life Now’s wears his crown. † (Ghost, 2429) In rder to find out the real truth Hamlet decides to put a play on the hires actors tor reveal the truth. â€Å"And cleave the general ear with hurried speech, Make mad the guilty and appall the free, confounded the ignorant, and amaze indeed† (Hamlet. 2430). The ghost is his father and his father tells him he did not die by a poisonous snake that was lie that everyone in Denmark was fooled by. He tells him the real snake is the person so is wearing the crown. Hamlet would be able to see the real side of his Uncle. The reaction of the King of Denmark will show him if he really killed his father or not. Hamlet quick makes decision of Abdelaal 9 whether to take avenge or not. Rosencrantz and Horatio helped Hamlets put the play on. â€Å"Even those you want to take such delight in the tragedians of the city† (Rosencrantz, 2439. ) Suspiciously, the King of Denmark ends up knowing that Hamlets found out the truth Claudius his Uncle has been hiding, and tried to kill him. â€Å"Get from him why he puts on this confusion grating so harshly all his quiet with turbulent and dangerously lunacy? †(King, 2450). The King wants to get back at Hamlets so he tells Polonies about Ophelia and Hamlet. I do repent, but heaven hath please it so, to punish me with this, and I will answer well, the death I gave him, so again, good, I must be cruel only to be kind†( Hamlet. 2450). Hamlets avoided Ophelia because he loves her and he is seeking for avenge towards his Uncle. Killing his Uncle meant allot to him, because he saw everyone around him mad, and angrily felt that was the right t hing to do, because he is paying death with respect. The king tells Laertes which is Polonies Laertes father, that Hamlet killed his father. â€Å"Not that I think you did not love your father. But that I know love is begun by time† (King, 2477). Now Laertes wants to take avenge for his father. † I‘ll not be jangled with to hell allegiance! Vows to the blackest devil conscience and grace to the profoundest pit! I am damation. To this point I stand, that both the worlds I give to Abdelaal 10 negligence, let come what comes only. I’ll be avenged most thoroughly for my father† (Laertes, 2478). The king brings Hamlets to Laertes so they can fight Hamlets ends up getting wounded, and Laertes end getting wounded and dies. The ling wanted to poison Hamlet; instead the Queen drinks the poison. No, no the drink-O my dear Hamlet- The dink, the drink I am poisoned† (Queen, 2497). Hamlet angrily makes the King drink the poison. † Forcing the King to drink, here. Thou, incestuous, murderous, dammed Dane, Drink off this potion. Is thy union here? Follow my mother? †(Hamlet, 2498). Hamlet was so mad at his Uncle’s ignorance. Hamlet l ooks around everyone is dead so he kills himself. â€Å"O, I die, Horatio, the potent poison quite o’er cows y spirit, I cannot live to hear the news from England, But I do prophesy th’ election lights, on Fortinbras. He has my dying voice so tell him. with, with the occurrences, more and less, which have solicited the rest is silence† (Hamlet, 24997). When Hamlet killed his Uncle, it wasn’t more of decision; his manger towards the loved one dying caused him to make his Uncle feel the same way. However his decision impacted Denmark in good way, because it would no longer be controlled by a bad King. Hamlet was looking at bigger picture. He sacrificed his teenage life for Denmark people to be in good hands. Abdelaal 11 â€Å"Whether tis nobler in the mind to suffer The slings and arrows of outrageous fortune, Or to take arms against a sea of troubles, And, by opposing, end them? To die, to sleep No more and by a sleep to say we end The heartache and the thousand natural shocks That flesh is heir to tis a consummation Devoutly to be wished! To die, to sleep. To sleep, perchance to dream ay, there the rub, For in that sleep of death what dreams may come When we have shuffled of this mortal coil, Must give us pause. There the respect That makes calamity of so long life. † (Hamlet, 2439) Nasty things that luck throws your way to fight against all those troubles by simply putting an end to them once and for all? It sleeps and maybe dreams but worries about life. This is how Hamlet felt before making the decision he made is mind about. Overall, everyone dies. Should have he done something before this tragedy happened? Hamlet was constantly going back in forth. At the end he made a decision by taking avenge for his father and killing himself so he doesn’t face the new of England and not live the rest of his life miserable and feeling guilty. â€Å"Of that I shall have also cause to speak, And from his mouth whose voice will draw on more, But Abdelaal 12 let this same be presently performed, Even while men’s minds are wild, lest more enhance , on plots and errors happen†( Horatio, 2488). The actions the King states become pouted. Hamlet had to put his life on the line for Denmark to punish Claudius. As a young boy Hamlet, was a normal person went to school lived his life, and matured up when he put his life on the line for his country, which ended up in an outrageous ending. Abdelaal 13 Works Citied Crowther, John, ed. â€Å"No Fear Hamlet. † SparkNotes LLC. 2005. http://nfs. sparknotes. com/hamlet/ (accessed June 8, 2012). Shakesphere, Wiiiam. â€Å"Hamlet. † Hamlet. 8th ed. Vol. 1. United States: Matnard Mark, 1984. 2406-500. Print. How to cite Hamlet Complex Decision, Papers